Facebook
Fark
Digg
Reddit
Stumble
Tuesday, Oct. 6, 2009 | 1:18 p.m.
Sun Coverage
- Judge denies request to dismiss Lake Las Vegas case (10-2-2009)
- Current, past owners spar in Lake Las Vegas bankruptcy case (9-21-2009)
- Council briefed on Lake Las Vegas bankruptcy (9-15-2009)
- Lake Las Vegas proposes bankruptcy plan (9-5-2009)
- Lender sued over Lake Las Vegas loans (9-3-2009)
- Lenders to foreclose on Lake Las Vegas’ last golf course (6-29-2009)
- Judge approves bankruptcy for Lake Las Vegas golf course (6-29-2009)
- Another golf course to close at struggling Lake Las Vegas (6-25-2009)
- Lenders seek control of Lake Las Vegas hotel (6-4-2009)
- Residents of bankrupt Lake Las Vegas face uncertainty (3-23-2009)
- Lake Las Vegas can abandon golf course, judge says (1-15-2009)
- Amid the decline, decadence for the feet (1-5-2009)
- Judge: Lake Las Vegas golf course should be shuttered (12-22-2008)
- Resort golf course’s fate spurs debate (12-16-2008)
- Never spoil a good party with talk of a recession (8-29-2008)
- Bridge over troubled water (5-24-2008)
Map of Lake Las Vegas Resort
Lake Las Vegas Resort
1600 Lake Las Vegas Pkway, Henderson
Hopes for a smooth landing in the big Lake Las Vegas bankruptcy case are evaporating, with several parties challenging the development's reorganization plan.
Unable to meet debt obligations, 15 associated companies running the high-end development in Henderson filed for bankruptcy protection July 17, 2008. Lake Las Vegas currently has liabilities of about $728 million.
Under a reorganization plan filed Sept. 4, lenders would convert some debt into equity, certain creditors would be paid generally unspecified amounts and home-building would resume once the economy turns around.
The main lender and creditor is Credit Suisse Group AG, which says it's owed $675 million. That compares to the development companies' assets, mostly undeveloped land, being valued most recently at just $191 million.
Situated on 3,600 acres and featuring a man-made lake, Lake Las Vegas has some 1,600 homes.
Since the filing of the reorganization plan, these are among the creditors posting objections to the plan's disclosure statement:
-- Transcontinental Corp. of Santa Barbara, Calif.; which last week lost a bid to have the bankruptcy case dismissed. The former owner of Lake Las Vegas calls the case a charade since, it claims, Credit Suisse already controls Lake Las Vegas. That makes the bank both the project's main debtor and creditor, Transcontinental claims.
Lake Las Vegas has argued Transcontinental is maneuvering to avoid a lawsuit over its draining the project of $400 million in equity before it gave up control in late 2007.
Transcontinental says it was Credit Suisse, under a much-criticized loan program involving the Yellowstone Club and other resort developments around the West earlier this decade, that provided the financing enabling it to recover its equity.
It was that financing that ultimately proved unaffordable for Lake Las Vegas after the recession set in, Transcontinental maintains.
-- Carmel Land & Cattle Co., which foreclosed on two Lake Las Vegas golf courses and has asserted financial claims against two of the Lake Las Vegas companies over its losses on the golf courses.
-- Three companies owning land in Lake Las Vegas called IOTA Emerald LLC, IOTA Sixteen LLC and IOTA Twenty One LLC.
-- A company called Gamma4C, which has an interest in some Lake Las Vegas land and office buildings leased by Lake Las Vegas.
Carmel Land, in its objection, echoed some of the concerns of Transcontinental -- that Credit Suisse, by controlling the bankruptcy process, is behind the reorganization plan that benefits Credit Suisse at the expense of other creditors.
"From the outset, these bankruptcy cases have been driven by the debtors' principal prepetition lenders Credit Suisse, Cayman Islands Branch and Credit Suisse Securities LLC, and the pre-petition lending group," Carmel Land attorneys wrote in their filing. "This plan was written to benefit the lenders, and provides virtually nothing to creditors other than that which the lenders would do for their own sake as the largest post-confirmation property owners in Lake Las Vegas.
"The debtors, under the control of Credit Suisse, have proposed a plan that releases causes of action against Credit Suisse, in any capacity; the pre-petition lending group; the affiliates, respective members, managers, officers, directors, employees, advisors, professionals or agents of Credit Suisse or the lenders; and the debtors' current management without any disclosure at all as to the value of those causes of action, what analysis was done in connection with those claims, the likelihood of recovery by the debtors on those causes of action and the real necessity of providing these releases to the overall reorganization.
"The plan proposes to bring claims for the benefit of Credit Suisse and the pre-petition lending group without any disclosure at all concerning what those claims are or why those causes of actions should proceed while the claims against the lenders should not," the Carmel Land filing said.
Carmel Land also complained about a plan by Lake Las Vegas to have more affordable housing built in a future phase of the development.
The "proposal will dramatically and permanently alter the Lake Las Vegas Resort and substantially devalue the luxury homes already developed and the land for future luxury homes already purchased by developer/creditors of Lake Las Vegas," attorneys for Carmel Land complained in their filing.
The IOTA companies, in their objection, said the disclosure statement isn't clear about how the reorganization will affect the IOTA interests.
"The disclosure statement provides such a paucity of information detailing the effects of the plan on the IOTA Properties that it is impossible for IOTA to make an informed judgment regarding the plan’s feasibility and its impact on the IOTA properties," IOTA's filing said.
Gamma4C, in its objection, said the reorganization plan's disclosure statement makes vague allegations that claims for mismanagement may be pursued against Gamma4C. "Gamma4C has never heard any complaints from anyone that it has mismanaged anything," the company said in its filing.
Gamma4C also noted that on July 27, the case's Unsecured Creditors Committee filed a lawsuit alleging predatory lending against Credit Suisse concerning Credit Suisse's $560 million loan to Lake Las Vegas in 2004 -- predatory-lending charges similar to those in the widely-followed Yellowstone Club case.
Credit Suisse has denied the allegations of predatory lending.
Gamma 4C noted that the Creditors Committee has now agreed to dismiss the lawsuit and support Credit Suisse and Lake Las Vegas in their claims against Transcontinental.
"The timing of these events and lack of proper explanation and description raises many concerns," Gamma4C said in its objection.
"A proper analysis is not given concerning why the claims against Credit Suisse will be so readily and easily discarded, while the claims against Transcontinental will be pursued with great vigor. Making this lack of analysis more confounding is the fact that, at least facially, Credit Suisse is the obvious deep-pocket target, not Transcontinental," Gamma4C attorneys wrote.
The relationship between Credit Suisse and Lake Las Vegas's management company, Atalon Group, is shaping up to be a key issue in the case, with Transcontinental charging Credit Suisse controls Atalon and Bankruptcy Judge Linda Riegle last week reiterating she is troubled by the relationship.
Lake Las Vegas attorneys have not yet responded to the objections, except to those of Transcontinental. Hearings are set to begin Oct. 15 on the reorganization plan's disclosure statement.
you know what lake las vegas needs...
trailer parks!!!
Let's trade roman polanski for some of that collateral; put up a home for defrauded bankers, and make a virtual tv show
or tent cities on the unused golf courses
WizardofOz:
I have no great love for the City Council of Henderson, but a simple explanation is due, concerning the closed meeting.
Anytime a public agency meets with its attorneys to receive legal advice, it is in closed session, so that "the enemy" (whoever they are) does not sit in the audience and listen to the lawyer's advice.
You would do the same if you and your lawyer were to meet to discuss an important problem.
Remember that it has been repeatedly stated that the City of Henderson issued something like $33 Million in bonds to build infrastructure at the project. These sorts of bonds are supposed to be "non-recourse" as to the city's treasury, if the people and entities in Lake Las Vegas don't pay their assessments. It is said that the bondholders are owed $2 Million in delinquent payments due from the bankrupt entities. One thing the Henderson City Attorney is undoubtedly talking to the City Council about is whether the bond default will wreck the City's credit rating for future bond deals, including those where the City is paying the interest payments out of its own pocket.
The closed meeting also probably included a discussion of a complicated situation where the money from the Lake Las Vegas related bonds is sitting in an escrow account, and was not supposed to be released to the owners of Lake Las Vegas, until certain roads and infrastructure were fully completed. Obviously, that construction work stopped close to a year ago, so the City undoubtedly has questions about whether the money can be released to the City so they can finish the work.
Then there's the basic principle of bankruptcy law, that once a Chapter 11 Plan is approved by the judge, all contracts between the debtors and anyone in the universe, including the City, are automatically terminated, unless the contract has been put on a list of "assumed contracts" where the reorganized debtor and/or buyer of the property out of the bankruptcy will be bound. As a result, the City Attorney should have made a list of every contract between the City and Lake Las Vegas multitude of entities, and discussed with the Council the impacts on the City from the likely "cancellation" of the contract when the Chapter 11 Plan is approved. Since there will be little or no money under the Chapter 11 Plan to pay unsecured creditors, which is what the City would be as to their "breach of contract" claims if the contracts are terminated by the approval of the Chapter 11 Plan, the City Attorney should also be discussing that issue with the Council.
Thanks, CynicalO, you are the best.
On a non-related issue, I met 2 thirtyish guys who recently bought a condo at LLV for $59 a sq ft. Small place, 650 sq ft. But it's going to be their twice a year drinking and golfing home. They did say that the HOA's are foolish, at $500/mo, but this does include utilities and such. So my simple question is-Why do they include utilities in LLV's HOA? I'E if I'm there for 10 days a year, do I pay the full load?
Beuller? Bouvier? Bouvier?
Bdover: I was told some of the condos there could be in a hotel pool. It would make sense if you have short term renters that could not pay utilities.
With electric and water incld, the hoa is not that bad.
LLV is basically a movie set with no soul. In fact that's what it should be used for, a movie studio. It was built for a few scam artists to make money on uneducated investors.
Bdover, didn't you mean to say.. "Bouvier, Bouvier, wherefore art thou Bouvier"? :)
Yes, the condo dues for Viera and Luna do include all utilities, including the water, electric, cable, internet etc. Most people have their condos in the rental pool as I do. Since I have a fabulous lake view, my condo is always rented when I'm not there. So, the pooling of the utilities in the HOA is a good thing for me. During the summer, when Viera and Luna were at nearly 100% capacity, it was good for all unit owners. But, if not in the rental pool and you only use your condo 10 days a year, you pay the same amount each month.
There is also a decent gym in both Luna and Viera, so you don't need to pay for a gym and Viera even has a game room with air hockey and few other games.
Nick, Luna and Viera can be placed into a rental pool. It's the perfect and the only way for me to be a rental property landlord without all of the risk associated with renters. I'm in the legal/insurance industry. Renting a condo to long-term to tenants, who damage your property, don't pay their rent, and then find a reason to sue you after they leave is just not for me. I see it every day in my job.
The Intrawest-Lake Las Vegas concept is great! Short-term renters, credit card on file for any damage, daily maid service, maintenance on-site, etc. And, I get to write-off much of the expenses and get to use it for my vaction too! The IRS allows you 14 days of use,(not including visits for HOA meetings or maintenance) without penalty. It's a great time to buy!
Despite what some people say in these comments, the village is still busy. The village is not bankrupt and not part of the LLV developer issues. There are a ton of free activities, many for families. Check out the Halloween night activities and others this month. I just rec'd an email from the Wynn on the strip... rooms $109.00 with 75$ resort fee credit. These are trying times everywhere. Like every hotel/resort, things are slow, but will turn-around in time.
BDover, did I anwswer your question and then some? Nick, my only advise if you buy a condo there make sure it has a lake or a nice view. They always rent first.
We love LLV, but unfortunately we are loosing our home in Belle Fiore (even after putting 55% down)..with no work, we cant pay the mortgage. We love the life style, etc. The village and restaurants are great..God we'll miss it here and hate to leave, but what can we do. Our life savings are now gone like alot of americans. We hope to be back.